Objectives of Lecture • Critically explore the relationship between the development of the nation-state and capitalism • Assess competing explanations of ways in which contemporary processes of globalization are impacting on states
Structure of Lecture Section One: Exploration of two approaches to understand relationship between Market and the State Section Two: Analyzes of Contemporary Processes of State Restructuring
Section One: Two Competing Accounts of Capitalism and Nation-State • Liberal understanding of state and market of Cerny and Strange which understands these as distinct entities • Open Marxist account of state/market which understands the state as a regulatory agent and manifestation of wider social relations of production
Liberal View: • Relatively simple. State and Market as separate (potentially oppositional) entities. • If not a zero sum power game between the two than certainly a balance of power between the two entities
For Strange and Cerny Expansion of Markets, particularly transnational markets undermines the autonomy and/or effectiveness of national public policy • See also Michael Mann, Saskia Sassen, Popular policy discourse and oddly Hirst and Thompson
Clearest Statement is provided by Susan Strange “The impersonal forces of world markets, integrated over the postwar period more by private enterprise in finance, industry and trade than by the cooperative decisions of governments, are now more powerful than the states to whom political authority is supposed to belong”
Cerny position is more complicated. For Cerny what is in decline is not so much state capacity as state autonomy • Increased openness forces shift from welfare to competition state • Shift from welfare to enterprise, self-sufficiency to flexible shift to market conditions and macroeconomic to the microeconomic
Historical Materialist Approach: • Modern State is a product and reflection of capitalist relations of production • Modern State product of absolute property and the division of economic and political
The State is thus manifestation of wider set of social relations • It is a regulatory agency whose purpose is to insure the maintenance of capitalism (the completion of circuit) • Talk of autonomy is nonsense
There is difference between rather dismissive approach to globalization of Woods and other scholars who seriously consider the impact of changes in the composition of global markets on how state performs regulatory function. • For example Burnham and Depoliticisation
Although methods share little in common and critically influence understanding of contemporary processes there is a least a superficial similarities between the conclusions of certain Marxists and Cerny. But process and history are important.
Contemporary Processes of State Restructuring • In a sense we need to assess different theories of state transformation through a empirical analyses testing different theories • However, there are problems with seeking empirical answers to questions of state transformation through a simple analyse of policy.
The same concrete phenomena can look very different depending on the analytical position you approach it from • For example, Strange/Harvey on failures of systems of financial regulation
Also question of establishing material/ideational cause • Finally, problem of an wealth of evidence. A accurate assessment of global state restructuring requires an impossibly broad knowledge of political economy
Nevertheless I would argue that we are witnessing a new dominant state form developing and that the composition of state can be understand as reflecting changes in composition of global markets. 7 policy areas.
Monetary policy: Establishing of Independent Central Banks and rules based regimes which remove policy from political contestation
Corporate Governance: Move to system based upon market/ shareholder discipline German Corporate Sector Supervisory and Transparency Act in 1998 US 2002 Sarbanes–Oxley Act
Industrial Policy: Shift from securing competitiveness of particular national firms to meso-level competitiveness of the ‘space’
The organisation of public services: Transformation of state itself into a sphere of accumulation
Labour Market Regulation: Individualisation of Wage-Labour Relation. Flexibility. Welfare states become tools to promote competitiveness
Regulatory Reform: Independent regulatory agencies Purpose of reform is correct market failures and enhance competition \ Market based regulation Globally recognized regulatory standards
Serious Problems with attempting to attribute changes to either ideological mirage of Globalisation or domestic politics. However, there is no reason to necessarily privilege the spatial nor overstate previous autonomy
Conclusion • How we understand the basic relationship between state and market/capital is critical to how we understand globalisation • Our answers to the key questions concerning the state almost over determines our answer to subsequent questions concerning welfare etc • Difficult questions to reach definite conclusions to!